Thursday, August 26, 2010

Forewarned $7 a Gallon Gasoline is Coming - How Will You Survive To Later Thrive?

Oslo Norway business already lives with up to $7.41 a gallon costs for gasoline. How long do you think before you and I will begin moving toward 7 dollars a gallon in the US?

The reason to plan for this is basic and obvious. When the price of gasoline goes up, you use less and America pays less to OPEC. So how long do you realistically think it will be before our politicians officially discover this fact? It is not like they have not known about this logical answer for years.

After all, Ross Perot suggested it in 1992 to address the national deficit, move Social Security toward solvency and to pay for our roads and bridges, which many experts now describe are becoming so hazardous as to life threatening (think of the I-35W Mississippi River bridge collapse in 2007).

Fortunately and unfortunately the US has not dramatically raised gas taxes YET. Fortunately, because none of you want to pay more for gasoline, at a time when all your budgets are perilously stretched.

Unfortunately, because when it happens, the ramp up by month and year will be much more dramatic than if we had started earlier like Europe did.

If this politically unpopular idea of fifty-cent-a-gallon gasoline tax increase to help pay off the deficit had been implemented, we would have already made a major step towards addressing both the deficit and our dependence on foreign oil.

For those of you wanting to hide your heads in the sand ostrich style and think it will not happen any time soon, get real about a reasonable time frame for this issue to receive prominent publicity again. Check into when the Federal Deficit Commission working on a list of logical issues to address to address our trillion dollar string of deficits will issue a report.

If you remember that report is being researched now and results will be voted on and written over the next few months, will you still bet against a gasoline tax being approved by the commission?

Whether you use scenario planning, enterprise risk management, risk management, strategic planning or any similar named approach as part of your budget planning and strategic planning overview this year, how can you avoid addressing this very logical near term risk of higher energy costs?

Assuming gasoline is 4 dollars a gallon, what is the impact on your business and life.

Move out a little further and strategically think about the risks to your business model of 5 dollar a gallon gasoline.

Is your stomach strong enough to think about the equivalent of 6 or 7 dollars a gallon for gasoline in the foreseeable future?

So when your politicians find this logical answer to addressing the deficit and returning roads and bridges to safe and usable status again, what should you have started doing tomorrow to minimize the impact to your business and personal life? Making this into an opportunity, how will you gain a huge advantage over a competitor who does not plan for this looming risk?

After all the job or business you save with some advance planning might be your own.

Bottom line? - Control your financial destiny! Capitalize on hidden high return opportunities, while limiting exposure to risk.

Risks are what really go wrong when you are not looking: stupid things like bounced checks, losing your best customers or best people when you are blindsided.

By : Gary_W_Patterson

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